Wall Street was still looking for another quarter point rate cut next Tuesday, but a robust reading on U.S. nonfarm payrolls in a government report due on Friday would dampen the outlook for a more aggressive half-point move.

Data showing U.S home foreclosures rising to record highs in the third quarter were largely dismissed as old news.

Jobless claims retreated but remained at the higher end of the recent range, painting a mixed picture of the labor market.

All the attention will now turn to Friday's jobs report.

Economists are looking for a gain of around 90,000 for November, following October's 166,000 rise, according to a Reuters poll.

Complicating the bond market's likely course of action following the figures is its almost symbiotic inverse link to equities in the current risk-averse environment. If the Fed sends enough signals about its willingness to continue easing policy and stocks rally, the bond market might just extend this week's selloff.